Economics- Part 1

Grade 13 (2019)

Provincial Department of Education Northern Province

General Certificate of Education (Adv.Level) Examination Practice Examination 2019 - May

Economics- Part 1

Time: 2 Hours

Answer all the questions In each of the question from 1 - 50, pick one of the alternatives (1), (2), (3), (4), (5) which

you consider as correct or most appropriate. Mark a cross (X) on the number Corresponding to your choice in the answer sheet provided

1. The Scarcity is 1. the shortage of a few goods of a country 2. the situation of Human wants does not fulfill by using the available resources of an economy 3. there is not scarcity due to the economic growth 4. the scarcity problem will not occur in a meric 5. the choice problem of an economy will not arise due to the scarcity

2. Which of the following is a Social capital? 1. Agricultural land 2. Factories and building 3. Telecommunication network 4. Public road 5. Surgery centers

3. Choice of an economics is arise due to 1. the scarcity 2. unlimited needs for scarcities of resources 3. limited needs and limited resources 4. unlimited wants and limited resource 5. limited resource of all societies

4. When an economy produce a point on the production possibility curve 1. Some resources is used in an economy 2. That is a feature of a market economy 3. The resources which have not allocative efficiency 4. That curve which has an increasing opportunity cost 5. That is indicated production efficiency

1 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

5. Identify the correct statements 1. Contraction of demand is indicated the leftward shift in demand curve 2. Increase in demand elasticity is indicated the rightward shift in demand curve 3. Due to the increase in real income, when price of a particular good increase the quantity of demand decrease 4. Negative substitution effect related to inferior good is more than negative income effect 5. When price of a particular good which has an elastic demand, increase producer's income will increase

6. The demand equation change from Qd = 600 ? 10p to Qd = 700 ? 10p which of the following is a reason or this 1. Increase in price of substitute goods 2. Price of a particular goods increases as double 3. Consumer's taste change 4. House hold's income decrease 5. Decrease in price of a substitute goods

7. The demand and supply equation of a particular good are given below

QD = 200 ? 5p

QS = -100 + 5P

If the government purchases excess supply at price Rs 35.00, what is the value of change in

purchasing expenditure?

1. Change by Rs 1500.00

2. Decrease by Rs 1125.00

3. Increase by Rs 1125.00

4. Increase by Rs 2625.00

5. Decrease by Rs 1500.00

8. In which of the following situation, equilibrium price of a competitive market decline 1. Price of production resources increases, when there are elastic demand situation 2. Input prices decrease, when there are in elastic situation 3. Unit tax imposes, when there are perfectly in elastic demand situation 4. Unit tax imposes, when there are perfectly elastic supply situation 5. Production subsidy provides when there are perfectly elastic demands

9. The government imposes a minimum control price for benefit of the producer which is sold at a competitive market. Consider that the government purchase excess production. What is the effect of producer surplus and consumer surplus due to the control price?

2 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

Producer Surplus 1.Decrease 2.Decrease 3.Constant 4.Increase 5.Increase

Consumer Surplus Decrease Increase Increase Increase Decrease

10. The demand and supply equation of a particular good which is sold at a market are given

below

Qd = 6000 ? 100p

Qs = - 2000 + 100p

Consider that the Government impose a control price an Rs 30.00 which of the following is

correct

Import Expenditure

Total Cons

1. Rs 60,000 2. Rs 30,000 3. Rs 60,000 4. Rs 60,000 5. Rs 90,000

Rs 80,000 Rs 60,000 Rs 90,000 Rs 30,000 Rs 60,000

11. The following diagram shows that the demand and supply curves of a market where sold a cloth

If the government decides to provide import quota an Rs 200 thousand. What is the value of equilibrium price and equilibrium quantity for cloth?

1. Equilibrium price Rs 50, Quantity 300 units 2. Equilibrium price Rs 40, Quantity 200 units 3. Equilibrium price Rs 30, Quantity 200 units 4. Equilibrium price Rs 30, Quantity 100 units 5. Equilibrium price Rs 30, Quantity 300 units

3 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

12. Although price of a particular good increase, producer income has declined for that commodity so that good which has? 1. an unitary elasticity of demand 2. perfectly elasticity of demand 3. perfectly in elastic demand 4. price elasticity of demand 5. supply elasticity of demand

13. A firm sells 10 million Kandos at Rs 10, Price elasticity of demand is -2.5 if that firm decrease the price by 20%, income of that firm 1. Increase by 50MRS 2. Decrease by 20 MRS 3. Increase by 30 MRS 4. Decrease by 40 MRS 5. Increase by 20 MRS

14. The demand equation of a particular good is Qd = 300 -10p consider that the good which has

constant supply 150 units in all prices.

The government set minimum control price as Rs 20.00

Which of the following combination is correct?

Excess Supply

Change in consumer surplus Change in producer surplus

1. 625 Units 2. 50 Units 3. 50 Units 4. 100 Units 5. 150 Units

Rs. 625 Rs. 625 Rs. 750 Rs. 1125 Rs. 750

Rs. 750 Rs. 750 Rs. 625 Rs. 2250 Rs. 1125

15. When the Average product (AP) of a firm reach maximum point in short run 1. Marginal product decline 2. Marginal cost decline 3. Average cost increase 4. Total production will reach maximum point 5. Marginal cost intersect the minimum point of average variable cost

16. Profit maximization output level of a perfectly competitive firm is determined 1. When increasing marginal cost is equal to marginal revenue 2. When marginal benefit is equal to marginal cost (MB=MC) 3. When marginal revenue (MR) is equal to marginal cost 4. When total revenue is equal to total cost (TR=TC) 5. When law of diminish is extreme

4 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

17. Consider that the profit maximization output level of a perfectly competitive firm is 2000 unit and market equilibrium price is Rs 50. The firm earn economic profit an Rs 20 000 at this output level AVC at equilibrium output level is 30 Rs, so producer surplus is 1. Rs 100 000 2. Rs 80 000 3. Rs 60 000 4. Rs 40 000 5. Rs 30 000

18. When the output level which is equal to tangent point of total revenue and total cost of perfectly competitive firm 1. Firm will earn normal profit 2. Firm will earn profit 3. Firm minimizes loss 4. Profit maximization of firm will held 5. That is a breakeven point

19. Which of the following production activities are not included at production boundary in national accounting? 1. The own account production of housing services by owner occupiers 2. Weaving cloth, dress making 3. Activities such as decorating and cleaning of a house 4. All goods and services sold at the market 5. The processing of agricultural products, fish for preservation

20. The calculation of the value of gross national income according to the expenditure method of national accounting 1. Final consumption + Gross Domestic capital formation + Export + Net foreign primary income 2. Final consumption + Gross investment ? Net import + Net foreign primary income 3. Private consumption + Gross investment - Net foreign primary income 4. Household consumption + Government purchases + fixed capital formation + Net foreign primary income 5. Final consumption + Gross Domestic capital formation + Change in stock + Net export + Net Secondary income

5 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

21. The following data are related to national accounting of an economy

Item

Amount (million Rupees)

Gross domestic product

22 000

Gross domestic capital formation

9 000

Govt purchases

5 000

Net exports

2 000

The Value of private consumption expenditure is

1. 5 000 Million

2. 6 000 Million

3. 4 000 Million

4. 8 000 Million

5. 12 000 Million

22. When government expenditure decline by 500 million in closed economy with government

sector, the income will decline by 2500 million. What is the value of marginal propensity to

saving?

1. 0.5

2. 0.8

3. 0.2

4. 0.75

5. 0.6

23. The tax multiplier is -1.5 in closed economy with government sector. When the equilibrium level of income increase by 500 million, in which amount of consumption and saving will change?

Consumption level 1. 200 million increase 2. 500 million decrease 3. 300 million increase 4. 300 million decrease 5. 350 million decrease

Saving level 300 million increase 400 million increase 200 million increase 200 million decrease 250 million decrease

24. If the slope of the consumption curve decline in simple economy, which effect will occur? 1. Value of multiplier increase and equilibrium level if income will increase 2. Value of multiplier decreases and equilibrium level of income will decrease 3. Value of multiplier increases and equilibrium level of income will decrease 4. Value of multiplier decreases and equilibrium level of income will increase 5. Value of multiplier decreases and equilibrium level of income will be constant

25. Consider that the government decrease the tax by 50 million and increase government purchasing expenditure by 50 million. Marginal propensity to consume is 0.60 so, the equilibrium level of income will

6 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

1. Increase by 200 million 2. Increase by 125 million 3. Increase by 250million 4. Increase by 50 million 5. Decrease by 200 million

26. Which of the following is considered as money in broad money supply (M2)? 1. Notes and coins and deposits 2. Cheques and saving deposits 3. Time and saving deposits 4. Cheques and fixed deposits 5. Notes and coins and demand deposits

27. The following data are related to money supply of Sri Lanka

Item Money multiplier M Money supply Currency held by Commercial bank Commercial bank's deposits Held by central bank

Amount (MRS) 5

2500 150 200

Currency held by public is 1. 250 million 2. 100 million 3. 150 million 4. 300 million 5. 500 million

28. The following diagram shows the aggregate demand (AD) and aggregate supply (AS) of an economy

7 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

What are factor which causes to move from AD1 to AD2 1. Increasing interest rate 2. Increasing government expenditure 3. Increase in tax 4. Increase in net import 5. Decrease in money supply

29. Increase the preference of the people to keep money in the form of money 1. It will occur, when money supply decline 2. It will occur, when market price GDP increase 3. It will occur, when net domestic product decrease 4. It will occur, when price of commodity declines 5. It will occur, when price of financial papers increase

30. Assume the one of the commercial banks in the banking system has cash reserves of Rs. 20 000 billion loans of Rs 30 000 and deposits of Rs 50 000. If required reserve ratio is 20%, what is the value of new deposits of banking system? 1. Rs 100 000 Billion 2. Rs 50 000 Billion 3. Rs 20 000 Billion 4. Rs 80 000 Billion 5. Rs 10 000 Billion

31. When the government engages in reselling at money market 1. Shortage of liquidity of commercial bank will increase 2. Supply of liquidity will increase 3. Supply of liquidity will decrease 4. Demand for loan of people will decrease 5. Excess reserves of commercial bank will decrease

32. Which of the following factor is reason for market failure of an economy? 1. There are public resources 2. There are positive externalities 3. Resources allocate efficiently by the market 4. Only private benefit consider by market 5. The government provides public goods and services

8 Provincial Department of Education- Northern Province

Economics A/L-Practice Exam -2019

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download